Workers consultation-the implications for business of the EC Directive

As part of their ongoing programme Article 13, the leading corporate social responsibility experts, have released a critique of the EC Directive on informing and consulting employees, which will soon become law in the UK.

The UK Government will be introducing legislation to establish a right to new minimum standards for information and consultation in large firms. What impact will this have on business?

A summary of the critique follows.

With globalisation markets are becoming increasingly competitive. Add to this rapid technological advances and shifts in consumer preferences, and it's easy to conclude that business is operating in a new economic paradigm. Organisations need to find ways to attract and retain the best employees, as new sources of competitive advantage are to be found in a business intangible assets, such as intellectual capital.

The EC Directive on worker consultation will make partnership between employer and employee, or union, mandatory. Can it lead the UK away from another 'winter of discontent, or will it just add another layer of red tape for business to deal with?

The barriers to implementation

Critics of the Directive have argued that employers could be forced to reveal commercially sensitive information. And if the pendulum swings too far towards employee consultation, companies will be effectively paralysed in the decision-making process.

There are also often barriers to employee involvement, particularly when the driver is to restructure the business to meet new market opportunities. Some workers will feel unsettled, and gaps in the skills base of the workforce quickly become evident.

The solution?

There is a productivity gap between the UK and competing economies, and effective communication between management and employees is one of the factors that can increase productivity in the workplace. But talking shops have no place in the modern workplace -- engagement must be action-focused and linked to the organisations business objectives. If any of this sounds familiar... its because we at Article 13 see the strategy of engaging with your employees as one of the central tenets of corporate social responsibility. Done in the 'right way, it can be a strategy that can deliver innovative ways to drive continuous performance.

For more on this topic and other issues relating to corporate social responsibility and its link to innovation, visit www.article13.com